Can You Believe the News?
Sunday, April 22nd, 2012
Will Rogers used to say “All I know is what I read in the papers.” These days he might be saying “All I know is what I see on cable television.” Either way, since most of us are too busy to investigate current events ourselves, we depend on news media to keep us informed.
Unfortunately, what we read or hear may be very misleading. Here is a recent example:
Earlier this month, a Medicare and Social Security trustee named Chuck Blahous issued an analysis of the Affordable Care Act, called “Obamacare.” Blahous claimed the law would add between $340 billion to $540 billion to the deficit in the next decade.
Blahous’s figures contradicted the conclusions of the Congressional Budget Office, that the ACA could decrease the deficit by billions, not add to it. Blahous said that the CBO was wrong because it had counted cost reductions twice.
Blahous’s paper was published by the conservative Mercatus Institute and distributed to news editors around the nation. Soon newspapers and television and radio news were reporting that “Obamacare” will cost billions more than the Congressional Budget Office had said it would.
The nation’s wobbly health care system and stubbornly growing federal deficit are both worrisome for Americans. This is true whether they are healthy or have serious illnesses such as mesothelioma or other cancers. Must helping people get health care now leave the nation with a crippling deficit?
People who support the President’s health care reform law soon cried foul. Blahous, not the CBO, was playing fast and loose with numbers, they said. In particular, he is playing fast and loose with Medicare figures.
The Affordable Care Act calls for new spending to provide medical insurance for those who can’t get insurance now because they are too poor or too sick. To pay for that, the ACA raises some taxes and also makes some changes in the Medicare program that will save money without cutting benefits. The CBO projects that the cost savings and new revenue combined will more than pay for the new spending, and so the ACA should reduce the deficit, not add to it.
According to columnist Jonathan Chait, Blahous based his contradictory conclusion on the assumption that without the Affordable Care Act, Medicare will run out of trust fund money in a few years. Since Medicare can’t spend money it doesn’t have, without the ACA Medicare would be forced to drastically cut benefits. So, the cost savings in ACA don’t count, Blahous said, because that is money a mostly defunct Medicare program would not have spent, anyway.
In other words, Blahous figured that without the ACA, we would have the same amount of spending cuts (since Medicare would be largely kaput) but none of the new spending. Blahous then arrived at his calculation of $340 billion to $540 billion added to the deficit by counting the cost of new spending alone, without the cost savings built into ACA to offset new spending.
Unfortunately, people reading newspaper headlines or listening to television or radio news don’t hear how Blahous arrived at his conclusion. They just hear that some expert said Obamacare will add billions to the deficit, which makes Obamacare sound like a terrible idea.
Don’t believe everything you read in the papers.
